Pow­er­ing a push in elec­tric bikes

E-bikes man­u­fac­tur­ers are woo­ing Amer­i­cans “Peo­ple in the U.S. don’t even know what an elec­tric bi­cy­cle is”

Bloomberg Businessweek (Europe) - - CONTENTS - The bot­tom line Mak­ers of elec­tric bikes are tar­get­ing the U.S., where sales are a frac­tion of those in Asia and West­ern Europe. Edited by Cristina Lind­blad Bloomberg.com

The vibe is buoy­ant at the head­quar­ters of BH Bikes in Vi­to­ria, a city in Spain’s Basque re­gion. Founded in 1909 as an arms man­u­fac­turer, the com­pany switched to bikes af­ter World War I and in­tro­duced its first elec­tric model in 2008. To­day there are more than 60, rang­ing in price from about $1,300 to $5,200. “Growth has been tremen­dous,” says Mikel Quin­tana, head of the e-bike divi­sion, who ex­pects to sell 20,000 this year, up 20 per­cent from 2015.

Across the At­lantic, Don DiCostanzo, the co-founder and chief ex­ec­u­tive of­fi­cer of Pedego Elec­tric Bikes, is also pumped. He an­tic­i­pates his 30-em­ployee com­pany, based in Foun­tain Val­ley, Calif., will sell 10,000 of the brightly col­ored two-wheel­ers, which start at about $2,300, this year. “What’s crit­i­cal is we built a dis­tri­bu­tion sys­tem with branded stores, just like Ap­ple,” he says, re­fer­ring to the com­pany’s net­work of 83 Pedego deal­er­ships.

The mar­ket for elec­tric bikes is frag­mented, with BH, Pedego, and dozens of other com­pa­nies sell­ing a mul­ti­tude of mod­els, rang­ing from el­e­gant fold­ing ver­sions aimed at yacht own­ers to fat-tire mon­sters for week­end war­riors such as hip-hop mogul Sean Combs, who showed off his at last year’s Burn­ing Man fes­ti­val. E-bike sales are ex­pected to to­tal $15.7 bil­lion glob­ally this year and reach $24.3 bil­lion in 2025, ac­cord­ing to Nav­i­gant Re­search. “It’s a cat­e­gory that is wide open,” says Ed­ward Ben­jamin, se­nior man­ag­ing di­rec­tor of ECy­cleElec­tric Con­sul­tants in Fort My­ers, Fla., and chair­man of the Light Elec­tric Ve­hi­cle As­so­ci­a­tion. “Lit­tle guys are jump­ing into a busi­ness that no one’s been pay­ing at­ten­tion to,” he says.

An e-bike is a bi­cy­cle with an elec­tric mo­tor. A rider can pedal with­out us­ing the mo­tor or use it for a boost. The mo­tors in the U.S. are gen­er­ally lim­ited to a max­i­mum of 20 miles per hour. Recre­ational rid­ers and com­muters can cover long dis­tances and han­dle hills with­out break­ing a sweat. Mo­tor­cy­cle bans have helped lead to mas­sive e-bike adop­tion in China, where more than 200 mil­lion are in use, ac­cord­ing to Ben­jamin. The coun­try is also the world’s big­gest e-bike man­u­fac­turer and ex­porter, with gi­ants such as Jiangsu Xinri E-Ve­hi­cle and Yadea Tech­nol­ogy Group each able to pro­duce sev­eral mil­lion an­nu­ally. Com­pared with Asia, North America is barely a blip—Nav­i­gant pre­dicts only about 152,000 e-bikes will be sold in the re­gion this year, though it ex­pects steady growth. “I would guess 90 to 95 per­cent of peo­ple in the U.S. don’t even know what an elec­tric bi­cy­cle is,” says Nav­i­gant an­a­lyst Ryan Citron, who uses one to get to his job in Boul­der, Colo. Un­like Europe, which boasts mul­ti­lane bi­cy­cle high­ways, the U.S. is “re­ally set up to com­mute by car, not by bike,” mak­ing main­stream adop­tion “very chal­leng­ing,” he says.

That hasn’t de­terred Prode­coTech, an e-bike man­u­fac­turer based near Fort Laud­erdale that opened an assem­bly plant in 2013 with the ca­pac­ity to pro­duce al­most 300 bikes a day. It sold about 4,000 e-bikes in 2015 and plans to pro­duce 8,000 to 12,000 this year un­der a new dis­tri­bu­tion deal with Dick’s Sport­ing Goods, ac­cord­ing to Robert Provost, co-founder and CEO.

BH’s Revo Di­a­mond in­cor­po­rates a 250-watt mo­tor and a lithium ion bat­tery

Electrics “fi­nally have legs to be able to take off in the U.S.,” be­cause cy­clists are feel­ing safer on the roads, bat­tery and mo­tor tech­nol­ogy is im­prov­ing, and retail prices are drop­ping, says Todd Grant, pres­i­dent of the Na­tional Bi­cy­cle Deal­ers As­so­ci­a­tion. How­ever, e-bikes have been banned in some U.S. cities be­cause of safety con­cerns. Some states’ ve­hi­cle laws lack spe­cific clas­si­fi­ca­tion for e-bikes, caus­ing con­fu­sion among rid­ers and po­lice, says Mor­gan Lom­mele of Peo­pleForBikes, an ad­vo­cacy or­ga­ni­za­tion that’s worked to get states in­clud­ing Cal­i­for­nia, Utah, and Ten­nessee to pass pro-e-bike leg­is­la­tion. “Once we get the big­gest op­po­si­tion—of­ten po­lice de­part­ments—to ride e-bikes, they say, ‘What’s the big prob­lem?’ ”

The U.S. mar­ket could de­velop “way faster” than Europe’s did, says Claus Fleis­cher, who heads Bosch’s e-bike divi­sion. The Ger­man multi­na­tional be­gan sell­ing mo­tors and bat­ter­ies for elec­tric bikes in 2011 and now sup­plies more than 60 brands, pri­mar­ily in Europe. It opened a sub­sidiary in Irvine, Calif., in 2014 and is spon­sor­ing e-bike ex­pos across the U.S., in­clud­ing one in Port­land, Ore., that ran for three days in late May. The expo’s or­ga­nizer is plan­ning to stage five more events in U.S. cities this year. At­ten­dees will have a chance to view a large ar­ray of brands and, per­haps more im­por­tant, take some of the two-wheel­ers for a spin. “You have to sit on the e-bike, push the pedals, and feel how the mo­tor am­pli­fies your own power,” Fleis­cher says.

Nick Leiber

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